Argentina and Indonesia Complain to WTO Over Spanish Biodiesel Rules

Geneva. Argentina has filed a complaint against the European Union, the World Trade Organization said on Monday, challenging Spanish rules that the South American country argues discriminate against its biodiesel exports.

An Argentine trade official told Reuters in June that the biodiesel trade was equivalent to 20-30 percent of exports to Spain. He said Indonesia, another major biodiesel producer, was also opposed to the Spanish rules.

The dispute comes after the EU filed a complaint against Argentina’s import licensing rules, and signals a worsening of trade relations since Argentina seized control of oil company YPF, a subsidiary of Spain’s Repsol, in April.

By “requesting consultations” at the WTO, Argentina is giving Spain 60 days to show its rules are not unfair. If it remains dissatisfied after that period it can ask the WTO to set up an adjudication panel which could force Spain to change its law if it is found to violate the world trade body’s rules.

Argentina says the rules, introduced in April, would completely block its biodiesel exports to Spain. It has previously called the rules “protectionist,” warning they could cost it $1 billion per year in lost export earnings.

Spain’s rules are part of the Renewable Energy Directive which is being implemented in all of the EU’s 27 member states. It aims to increase biofuel use — in line with national targets — and to increase the security of energy supplies.

Argentina’s Foreign Ministry said in a statement that the Spanish rules were an attempt to stop developing countries gaining more control of global value chains and evolving beyond their role as suppliers of raw materials.

Although Spain is the target of the complaint, the EU represents its interests at the WTO.

“The EU takes note of Argentina’s decision to request WTO consultations on the Spanish Ministerial Order of 20 April 2012,” said EU Trade Spokesman John Clancy.

“We will engage in good faith in the consultations, which we hope will be fruitful. We are in close contact with the Spanish and the Argentinian authorities on this matter.” (Reporting by Tom Miles; Additional reporting by Sebastian Moffett in Brussels and Hilary Burke and Hugh Bronstein in Buenos Aires; Editing by Andrew Osborn) REUTERS Reut Reuters

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